India

Elena
22 May, 2006
New York City

Indian market lost 4.2% at close but dropped 10% in the first two hours of trading triggering trading halt for one hour. Liquidity driven market has lost 20% from its peak on May 10th then Sensex reached 12,612. Asian markets closed lower led by steep declines in Indonesia, Korea, Thailand and Japan. Trading volume on the exchange was light and mutual funds with liquidity stayed on the sidelines. International investors continued to sell.

[R]9:00AM Indian Sensex sheds 10% on sales and weak Asia.[/R]
Sensex in India fell 10% down, or 457 points to close at 10,481.77. The turnover on the BSE was $900 million or Rs 3,978 crore, down from Friday’s $1.2 billion or Rs 5,134 crore. Most small-cap and mid-cap stocks ended lower today. Sensex index lost 10% in the first two hours of trading triggering trading halt in the afternoon Market managed to recover but sill closed 4.2% lower for the day. Sensex has lost 20% from the recent high of 12,612 reached on May 10th, 2006. Satyam Computer was one of the few stocks that closed 2.3% higher, at Rs 680. Others to end in positive territory were Bharat Heavy Electric Ltd., 0.5% higher to Rs 1,970, Cipla, up 0.2% to Rs 222 and ICICI bank, finishing 0.2% up to Rs 558.

Metal stocks led the decliners with Hindustan Zinc, losing 20% to Rs 631.55, Sterlite Industries, down 11% to Rs 360.30 and Nalco declining 6.4% to Rs 229. Tata Steel lost 7.6% to Rs 465, while Hindalco was down 4.6% to Rs 180. Tata Motors also lost 7.5% to Rs 785, following its disappointing earnings report. Among other companies hit the most were Wipro, declining 8% to Rs 451, Grasim, down 8% to Rs 1,770. Cement stocks were also struck as Ultra Tech Cement shed 8% to Rs 635. Maruti Udyog declined 7% to Rs 729 and heavyweight Reliance Industries suffered a hefty 5% loss to Rs 926.050.


[R]8:00AM The NYSE Group Inc. offered 8 billion euros for Euronext.[/R]
On Monday the New York Stock Exchange offered 8 billion euros ($10.2 billion) in cash and shares for Euronext which runs the Paris, Brussels, Amsterdam and Lisbon exchanges. The offer launched by the NYSE Group Inc. outbid a rival offer for the European stock exchange operator from Germany''''s Deutsche Boerse. The merging of the two stock exchanges would create ‘the world''''s largest and most liquid global securities marketplace’ with combined listings of $27 trillion. Euronext said in a statement that its supervisory board will meet Monday to consider the offer both from the NYSE and the proposal from Germany''''s Deutsche Boerse AG announced Friday.

According to terms proposed, each NYSE share would be converted into one share of common stock of the combined company, which would be named NYSE Euronext. Holders of Euronext ordinary shares would be offered the right to exchange each of their shares for 0.980 shares of NYSE Euronext stock and 21.32 euros ($27.22) in cash. The transaction terms also assume Euronext will pay to its shareholders its ordinary dividend of 1 euro ($1.28) per share this year and its previously announced extraordinary dividend of 3 euros ($3.83) per share. NYSE Euronext common stock would be listed on the New York Stock Exchange and Euronext.

Over the weekend Eurionext received further details of Deutsche Boerse''''s proposal. DB clarified that the value of its offer would be based on the two groups'''' average share price over the three months leading up to the closure of a deal. Deutsche Boerse issued a statement Monday denying a report that it would consider an all-share offer valuing Euronext at about 90 euros ($115) a share, but said it remains in contact with Euronext. Shares in Deutsche Boerse fell 5.3% to 104.85 euros ($134.02) on the Frankfurt exchange. Euronext dropped 1.9% to 73.15 euros ($93.50).


[R]7:30AM Asian markets closed mostly down save for Singapore and Taiwan.[/R]
Asian markets closed mixed. The Nikkei shed 1.8% to close 15858. Japan shares canceled out early gains as a drop in crude oil and metal prices hit Sumitomo Metal, down 3.9% and other raw material makers, such as Showa Shell Sekiya, losing 3.5%. Some big exporters bucked the downtrend to some extent. Toyota was up 0.66% and Sony gained 1.38%. Commodity prices struck Hong Kong stocks, as Hang Seng Index lost 2.5% to finish at 15910, with mining companies leading the decliners. Lingbao Gold slumped 12.6% and Jiangxi Copper was down 8.7%. South Korea''''s Kospi Index ended 2.5% lower at 1338.59, with Hyundai Motor shedding 5.3%. Singapore''''s Straits Times Index advanced 0.7% and Taiwan''''s Weighted Index gained 0.3%. Australia''''s S&P/ASX 200 fell 0.3% due to mining stocks dropping on diving metal prices.


[R]6:30AM European stocks incur losses on commodities and Asian weakness.[/R]
European markets slipped to a four-month low on Monday on commodity sell-off and Asian stocks giving up earlier gains. Banks led decliners as Deutsche bank slid 1.3% and Credit Suisse fell 1.8%. UBS also joined in to lose 2.4%. Oil companies lost too, as Statoil, the Norwegian oil company, fell 1.2% and Royal Dutch Shell shed 1.4%. Mining companies suffered heavily. Antofagasta was down 7.7% and Xstrata shed 1.4%. Mergers provided some respite with Alliance & Leicester, UK bank, gaining 6.1%, after an assessment by Credit Agricole, its potential buyer. In other news, Arcelor said it was in the process of reviewing Mittal Steel’s revised offer to decide on it.

Crude oil was trading 98 cents down at $67.55 a barrel at 0819 GMT after falling more than $1 to its lowest level since April 10. Brent crude was 84 cents lower at $67.85. Gold topped a high of $661.25 an ounce ahead of falling to as low as $643.00 ounce as fund selling speeded up. The U.S. dollar advanced against most other major currencies in European trading Monday. The euro bought $1.2753, down from $1.2772 late Friday in New York. The greenback traded at 112.49 yen, up from 111.66. The British pound traded at $1.8728 down from $1.8780.